Labour's one-seat majority on Derby City Council has vanished as the Liberal Democrats took three seats in Thursday's local elections.
Labour did gain one seat from the Tories, but lost the key Darley ward to the Liberal Democrats.
Labour now has 24 seats on the council, the Lib Dems 15, the Conservatives 11 with one independent.
The last time there was no overall control in Derby, the Liberal Democrats and Tories formed an alliance.
Liberal Democrat councillor Hilary Jones said talks will probably take place about power sharing.
"We will go away and talk to our groups about what happened tonight and then go from there," she said.
Derby's Labour leader Chris Williamson said: "We were fighting against one of the most vituperative campaigns by the national press against the Labour Party.
"It seems they were determined to ensure Labour got a bloody nose - and they have succeeded," he said.
Mr Williamson did manage to hold his own council seat on a night which saw the official turnout reach 35.2%.
Labour now hold 23 seats to the Lib Dem's 15, the Tories' 11 and one independent.
Meanwhile in Amber Valley, the Tories increased their grip on power taking three seats from Labour.
In Heanor West, Labour councillor Paul Jones beat the British National Party candidate by only 15 votes to hold the Labour seat there.
Conservative leader of Amber Valley council Alan Cox said he was relieved Labour had won seats in his local election to keep out the BNP.
"I am glad to say they (the BNP) did not win any seats in Amber Valley," he said.
"For the first time ever, I am glad to say Labour won seats," the Tory leader said.
The Derbyshire council was finely balanced before the vote, with the ruling Tories holding 24 seats compared to Labour's 21.
The new standings are Tories 27 seats and Labour 18 seats.
Mr Cox said his party's gains would give them a chance to build on the level of services already in place.